9 Questions You Should Ask Your Financial Advisor


When preparing to meet with a financial advisor for the first time, what's one question you should ask and why?


To help you best prepare to meet with a financial advisor for the first time, I asked financial coaches, CEOs, and business leaders this question for their best advice. From asking how to ensure you never run out of money to inquiring about their personal and corporate values, there are several questions you should be prepared to ask a financial advisor. These questions will help you make the best judgment about their professional competence in managing your finances.

Here are nine questions these leaders ask financial advisors they consult for the first time:

  • Ask How to Ensure You Never Run Out of Money

  • Ask to Know How They Are Paid

  • Find Out the Overall Returns Made for Clients the Previous Year

  • Ask to Know How Aggressively You Should Invest

  • Find Out What Your Five-Year Plan Should Entail

  • Ask About Their Investment Philosophy

  • Get Them to Explain How to Diversify Your Investments

  • Ask to Know Where You May be Going Wrong With Your Investment Strategy

  • Enquire About Their Personal and Corporate Values


Ask How to Ensure You Never Run Out of Money


When meeting with a financial advisor for the first time, there is only one important question: "How can I make sure I never run out of money?" After asking this important question, my financial advisor proceeded to make a cash flow analysis. This gave me a plan to follow, so I'd never run out of money and the peace of mind I needed.


- Janice Wald, Mostly Blogging


Ask to Know How They Are Paid


The first question to ask your financial advisor is how they get paid. If a financial advisor is fiduciary, they are legally obligated to act in your best interest. If, on the other hand, the financial advisor is non-fiduciary, this means they are not obligated to act in your best interest and can sell you financial products based on the largest commissions for him or herself. A fiduciary advisor usually pays a flat or hourly rate or a management fee (a percentage of your assets they manage). They will not earn a commission off of selling you certain products.


- Kristine Thorndyke, Test Prep Nerds


Find Out the Overall Returns Made for Clients the Previous Year


"What were the overall returns you booked for your clientele in the last financial year?" This question may seem invasive at first glance, but the inquiry being made here is restricted to the performance of the individual as a financial advisor, which makes it a valid one. The answer to this question will reveal the returns the advisor has clocked for their clients in the last financial year. It also provides the advisor an opportunity to convince you of their recommended investment approach and why it is better than the rest. While there's no way to check on the numbers the advisor reveals, the answer to the question should be enough to give you insight into how successful the advisor has been.


- Riley Beam, Douglas R. Beam, P.A.


Ask to Know How Aggressively You Should Invest


"How aggressively should I invest?" Your financial advisor can develop an investment plan based on a combination of what you have to invest and when you intend to retire. How much you can invest and how long you have to retire could determine how aggressively, both in how much and the kinds of investments they will advise you to make. Understanding how much you should be investing for retirement is critical.


- Brett Estep, Insured Nomads



Find Out What Your Five-Year Plan Should Entail


Ask them what would be a good five-year plan financially. This is an excellent place to start if you're unsure where to begin your financial journey. For example, they may ask you about your goals, whether saving or investing and can recommend accordingly. This question can set you up for success from the jump.


- Jodi Neuhauser, Ovaterra


Ask About Their Investment Philosophy


I would recommend asking them what their philosophy is on investing. This is because it's important that you work with someone with a similar investment strategy. You need to understand how they approach investing and whether they have biases that might affect how they advise clients. For example, if they like to invest in stocks or mutual funds, you can assume they might push you toward those types of investments. Similarly, if your goal is to make money now, you don't want to work with an advisor who believes in long-term investing. Therefore, it's important that you know their investment philosophy and how it aligns with your goals.


- Tiffany Homan, Texas Divorce Laws


Get Them to Explain How to Diversify Your Investments


"How can I diversify my investments?" Financial advisers can look at what you have to invest and compare it to your retirement age to create the investment portfolio that best suits you. Depending on how much time you have before retirement age, they can suggest how aggressively you should invest and how to diversify between high-risk and low-risk investments. Understanding your investment options and how much you should diversify is key.


- Zachary Hamed, Clay


Ask to Know Where You May be Going Wrong With Your Investment Strategy


"Can you tell me where I'm going wrong with my current investment strategy?" Ask your potential financial advisor to peek into your current investment strategy and give you quick feedback. After all, the main reason you're hiring an advisor is so you can correct or enhance your financial strategy. The comments you receive will tell you just how much the individual knows and how helpful they are in offering advice. The right advisor will take a thorough look, even ask for time to review your details, and only then get down to giving you preliminary feedback. When you find someone who makes the right diagnosis and willingly discusses essential details, you know you've found the right advisor.


- David Northup, InShapeMD


Enquire About Their Personal and Corporate Values


The first time you visit your financial advisor, you should enquire, "What are your personal or corporate values?" While asking this question may feel odd at first, the most serious financial advisors I've met in the last two decades should be happy to respond. This fosters a sense of belonging, trust, and a genuine desire to collaborate daily. Values aren't the only thing to consider while looking for the proper financial advisor, although I feel they are essential in long-term partnerships.


- Paul Walsh, Weselltek

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